Tag Archives: price risk

421-426 O. Läänemets, A.-H. Viira and M. Nurmet
Price, Yield, and Revenue Risk in Wheat Production in Estonia
Abstract |

Price, Yield, and Revenue Risk in Wheat Production in Estonia

O. Läänemets¹, A.-H. Viira¹ and M. Nurmet¹ ²

¹Institute of Economics and Social Sciences, Estonian University of Life Sciences, Kreutzwaldi 1A, 51014 Tartu, Estonia; e-mails: ottlaanemets@gmail.com; ants.viira@emu.ee
²Faculty of Economics, University of Tartu; Narva Rd. 4, 51009 Tartu, Estonia; e-mail: nurmet@eau.ee


 In recent years, price risk has been increasingly acute for Estonian cereal growers due to increased volatility of commodity prices in the world market. Price risk is especially important due to long production cycle of the cereals. Inputs for growing wheat are bought months before the harvest, but the producers are unable to affect the output price. Price volatility and yield uncertainty increase income uncertainty. In the paper we analyse wheat price and yield variability and respective impact of these on sales revenue of wheat in Estonian conditions. The results show that the variability of yields and producer price of wheat are similar, while the variance of sales revenue of wheat per hectare indicates that production and price risk cumulate.

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